Response to the Administrative Penalty Pre-Notification Letter from the China Securities Regulatory Commission

Futu today received an Administrative Penalty Pre-Notification Letter from the China Securities Regulatory Commission (CSRC) and the Shenzhen Regulatory Bureau (collectively referred to as the 'CSRC') concerning the company's conduct of securities business in mainland China. The notification states that Futu’s related entities in mainland China and Hong Kong (the 'Related Companies') engaged in securities business, public mutual fund distribution, and futures business within mainland China without prior CSRC approval or relevant licenses, thereby violating the Securities Law, the Securities Investment Fund Law, and the Futures and Derivatives Law of the People's Republic of China. The CSRC proposes to order the Related Companies to rectify their actions, cease the unauthorized operations, confiscate illegal gains, and impose fines. Specifically, approximately RMB 470 million in illegal gains will be confiscated, and fines totaling approximately RMB 13.8 billion will be imposed, resulting in a combined amount of approximately RMB 18.5 billion. Additionally, the CSRC proposes to impose a personal fine of RMB 1.25 million on Mr. Hua Li, the company’s founder and CEO. Futu will actively cooperate with the CSRC’s relevant proceedings.

Futu has maintained close communication with the CSRC and has continuously implemented rectification measures concerning its mainland China operations. As of the first quarter of 2026, funded accounts from mainland China accounted for approximately 13% of the company’s total funded accounts. Meanwhile, as the company continues to scale across international markets, the number of overseas funded clients has grown steadily. Futu’s business operations in Hong Kong and other international markets remain fully normal.

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